Anonymous Asked: October 8, 20212021-10-08T08:59:16+05:30 2021-10-08T08:59:16+05:30In: BusinessWhat you need to know about the legal implications of running a business?What you need to know about the legal implications of running a business?businesslegal 1 AnswerVotedOldestRecent Weboptify 2021-10-08T09:46:50+05:30Added an answer on October 8, 2021 at 9:46 am Running a business is not only about having the knowledge and idea to start it, but also involves procedures such as registering your activities with the relevant authorities or preparing legal documents. It is important for you to be aware of the potential legal implications involved in running a business before starting off on this journey.As a newly-launched startup, it is crucial for you to be up-to-date with current affairs in the legal world so that you do not get caught unaware and face fierce competition from your competitors. Incorrectly drafted contracts could have a serious effect on your business, so it is obviously best to consult a qualified attorney who will guide you through the process of running a business.First, we have compiled a list of common legal implications involved in running your own business. Second, our featured attorney has provided valuable insight on how to reduce the risk of breaking any laws while running your business. Let’s get started!You are responsible for all aspects of the business operation, including its liabilities and compliance with law. This means you must register and follow all necessary procedures and pay all relevant fees (taxes, accounting etc.). You must also make sure that every person working for you is qualified to do so and does not engage in activities which could lead to conflict of interest with your company. The consequences may include mandated sales disgorgement or dissolution of operating entity. A further aspect involves the protection of your business name.If you plan on running a business, it is important that you know what type of entity is right for your business. For many entrepreneurs, undercapitalization may be an issue; this means that they do not have sufficient capital to start their businesses (i.e., money, property etc.). With limited funds at hand, they often choose to operate as sole proprietors . This single-owner model provides only the owner personal liability for all debts and obligations related to his or her company’s operations. On the other hand, incorporation (via formation of an LLC, corporation etc.) limits the personal liability of its owners (shareholders/members) by separating them from the entity itself. If you plan on running a business that carries substantial risk (e.g., restaurant, car service etc.) and is likely to face considerable liability, we recommend that you seek professional advice before incorporating your entity.When operating a business, it is compulsory for you to maintain certain documents such as bank account statements and records of payment transactions (invoices). Any legal action brought against your company will require such documentation in order to prove your case. It may be difficult to provide evidence of operations without written proof; this could weaken your position in the courts. Thus, we suggest keeping copies of all receipts and invoices with date, amount and description clearly stated. You can also consider using an accounting software or app which provides similar information in an easy-to-understand manner. Having record of these documents will not only prove helpful in case of litigation, but may also provide you with information about your company’s financial status.Contracts are legal agreements between two or more parties which result in the creation, modification, transfer etc. of rights and obligations. Contracts can be oral or written; certain types of contracts must be written to be legally valid (e.g., sale of land). Additionally, contracts that contain terms imposing greater restrictions on consumers are subject to special requirements (e.g., consumer leases over $25,000) . For commercial entities providing services to other businesses (B2B), business contracts often include non-compete clauses which prevent either party from entering the same market for a given period of time. The consequences of non-compliance include tens of thousands in statutory damages and restitution. However, we recommend that you seek legal advice before incorporating such terms into your business contracts as they may not be legally enforceable. In addition to general contract requirements, certain types of agreements must be filed before your local county clerk’s office or state department (e.g., licensing deal between manufacturer and retailer).In order to run a successful business, you must make sure it is insured against potential risks involved with its operations . For example, if you own a restaurant, fire insurance will cover costs resulting from a kitchen fire. You need to maintain proper coverage which includes all assets owned by the company as well as contingent liabilities that may arise during company’s operations. There are several types of insurance available to protect your business depending on your specific needs. We suggest consulting with an insurance broker who deals with commercial policies as they will be most knowledgeable about the risks involved in your company’s line of work .If you plan on starting a business, it is important that you know how to protect yourself from potential risks. Before coming up with a concept for your product or service, you should consult professionals (e.g., lawyers, accountants etc.) and seek advice which will help make important decisions such as what type of entity should operate your business (e.g., LLC, corporation etc.). In addition to knowing the, we recommend familiarizing yourself with certain key legal terms and consulting with professionals in various fields (e.g., real estate, insurance) to ensure you are adequately protected before making any final decisions.0Reply Share ShareShare on FacebookShare on TwitterShare on LinkedInShare on WhatsAppLeave an answerLeave an answerCancel reply Featured image Select file Browse Add a Video to describe the problem better. Video type YoutubeVimeoDailymotionFacebook Choose from here the video type. Video ID Put Video ID here: https://www.youtube.com/watch?v=sdUUx5FdySs Ex: "sdUUx5FdySs". Answer Anonymously Save my name, email, and website in this browser for the next time I comment. Related Questions Why is optimising customer touchpoints online beneficial for businesses? What You Need To Know Before Starting A Business? 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